Anxiety, Depression & Phobias: Disability Tax Credit

In an April 3, 2019 Tax Court of Canada case, at issue was whether the impact of an individual’s mental impairment entitled her to the disability tax credit (DTC). The taxpayer suffered from social anxiety, depression and phobias. A taxpayer may be eligible for the DTC if the impairment(s) represents a marked restriction in the ability to perform a basic activity of daily living. In particular, the impairment must affect and permeate the individual’s life…

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Workers Compensation: Replacement Payouts by Employer

In a March 29, 2019 Tax Court of Canada case, the taxpayer had been injured on the job and was held eligible for workers’ compensation (WC) payments by the relevant provincial authority. However, in accordance with the collective agreement setting out his terms of employment, he was paid 100% of his salary by his employer and, therefore, did not receive payments from the provincial WC authority. He argued that the maximum provincial WC should be…

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Reimbursement For Work Clothing: Taxable

In an April 17, 2019 Technical Interpretation, CRA was asked whether clothing reimbursements paid to maintenance employees were taxable benefits. Employees were not required to wear specific uniforms and were reimbursed based on receipts, to an annual maximum. CRA referred to Guide T4130 Taxable Benefits and Allowances, which states that clothing is generally a personal expense, except where either of the following applies: the employee is required to wear a distinctive uniform while carrying out…

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Special Work Site Allowance: Home Base Needed

In a January 29, 2019 Technical Interpretation, CRA discussed the criteria for tax-exempt allowances for board and lodging received for periods an employee was working at a special work site. To be a special work site, the following criteria must be met: the work performed at the location must have been of a temporary nature;the employee must have maintained a self-contained domestic establishment (SCDE) elsewhere which was used as their principal place of residence;the SCDE…

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Benefits Paid to Shareholder Employees: Are They Taxable?

The CRA is aware that owner-managers have an incentive to receive benefits deductible by their corporation which are non-taxable to the owner. In essence, this can be perceived as a method to extract profits out of a corporation without paying tax on it. As such, CRA is particularly vigilant to ensure that these benefits comply with the Income Tax Act and do not confer unfair advantages on owners. To start off, it must be established…

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